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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4884
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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There, I was wondering if you could advise me on tax return

Customer Question

Hi there, I was wondering if you could advise me on tax return self assessment.
I have a limited company, and money started going into my business account in July 2015 (as I opened the business account in July 2015)
Prior to this, for around 4 months, I had money from clients go into my personal account with hsbc.
As the self assessment is for April 2014 - April 2015, what should I do for the self assessment? Show that no money has gone into business account which is true?
Thank you
AJ
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question..Please clarify for meYou are running your business as a LTD company and some income has been deposited in your personal account whilst the business account was not open.Did you draw any- salary or dividendsfrom your company in the tax year ended 5 Apr 2015 Many thanks
Customer: replied 1 year ago.
Hi,Thanks for your response.How do you mean draw any salary or dividends?The way I have setup the business is I incorporated it, a limited company, made myself and wife a director, and have not setup anything regarding salary or dividends.In the tax year ending April 2015, all I did was advised a few clients to make payment to the following sort code and account number (which was my hsbc personal account), as I was starting the business. they transferred the money and as I could see the business could start working I opened a business account, and from July 2015 onwards money from any clients went into this new business account, everything accounted for.Last January 2015 tax return I advised my accountant that no money from the had entered any account which is true for April 2013 - April 2014. The same applies for April 2014 - April 2015 however for there has been money going into my personal account from January 2015 till July 2015.Amit
Customer: replied 1 year ago.
My accountant had completed my self assessment in Jan 2015 for me for a small fee, and asked if I would like to close the company as I am not making any money from it. I advised I'd like to keep it open and eventually open a business account when I start making money.Hope this helps
Expert:  taxadvisor.uk replied 1 year ago.
Amit, thank you for your reply..Please advise- the nature of your business- was the money intended for the business- is all money deposited into your personal account being accounted for as company income- how much was deposited between Jan - 5 Apr 2015- is the company now making a profit Many thanks
Customer: replied 1 year ago.
Sure,It's a photography business (or hobby)The money in a way was more a donation from friends to be honest to test to see if I could make a photography business work.The money or donation received is not being accounted as company income.there's probably around £9000 deposited between Jan - 5 April 2015.Since opening the business account, in July 2015, the clients are not friends but real clients, I have given receipts and accounted for all transactions. The company since July 2015 is making profit.Thanks
Expert:  taxadvisor.uk replied 1 year ago.
Amit, thank you for your detailed response Here is a practical solution... the sums involved are not big. The donations/payments were not free money. They may appear to be donations but were payments of a kind for your effort albeit you and your friends were testing the water to see if you can make a success of the business.I would treat it- as business income and- consider it to be interim dividends paid by the company to you and your wife as return to shareholders (if you are both shareholders). Dividends are distribution of taxed profits and you have stated that the company is making profit (lets hope profit for the year is high enough to cover this dividend payment). On the other hand, you would have most likely paid for start-up costs etc out of your own funds. Depending on what is owed to you by the company, you could consider this sum as a repayment of balance on directors' account.I am happy to expand on this if you wish to have a quick phone chat..phone chat is an additional service and if you agree I will send you an offer. I hope this is helpful and answers your question. If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Customer: replied 1 year ago.
Hi,That's great advice. I will have a think about whether I'll have a phone chat tomorrow if possible..I have spent money on the start up business, and will check to see how much I have spent, to then see if this could be used as a repayment sum, especially if this helps reduce the amount of any tax owed.I think my next steps are to take a look into my company setup in terms of dividends, shareholders, (I don't think I've setup anything on these yet), then understand your advice and see how I can apply it.Then I could clarify with you?I wanted to know if I complete the self assessment with the above done correctly, i.e. considered the amount received into my personal account as business income and interim dividends etc, do you think I have time to meet the deadline Jan 31st without penalty of £100? My personal account with hsbc doesn't allow for business transactions of course, but as the sums are made from friends' personal accounts to my personal account, does it really need to be accounted for?I will rate your service as 5 stars Excellent after your reply as you have been great.Thanks
Expert:  taxadvisor.uk replied 1 year ago.
Amit, thank you for your reply.
You have all the time to meet the deadline ..there are countless hours left!!!!
If I were you, I would account for it as business and I have suggested how to deal with the utilisation of it.
I hope this is helpful.
If there are no more issues, I will appreciate if you would kindly rate my service/accept the service I have provided before you leave the site, to ensure I get credited for it by Just Answer.
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4884
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 1 year ago.
I thank you for accepting my answer.
Best wishes
Customer: replied 1 year ago.
Thank you, you've been most helpful.Have a good evening, and may ask a few more questions tomorrow.Amjt
Expert:  taxadvisor.uk replied 1 year ago.
Amit, thank you for your good words.If yiu wish me to answe your questions, please request my name in the body of your question. This way, other experts will live the question for me to respond. A good evening/hight to you too.

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